11 ms·
Europe will do everything, except build more housing supply, to lower rents.
by MysticFear 2y ago
Europe will do everything, except build more housing supply, to lower rents.
- betaby 2y agoEurope is not unique in this. Canada will go extra mile in order not to build.
- BobAliceInATree 2y agoYeah, the USA (in general) won’t do anything at all. A few medium-sized cities like Austin are the exception to this.
- kortilla 2y ago??? Lots of large cities are building a bunch. Every large city in Texas, Phoenix, Tucson, Salt Lake, etc.
- IncreasePosts 2y agoFlorida feels like every square mile is under construction with new builds too.
- bluGill 2y agoThose could be called medium sized.
- epistasis 2y agoIt's the perfect political position if you want to pacify the less economically literate non-land-owners while also pleasing the land-owning class. So we do it inside US cities too.
- mytailorisrich 2y agoOr limit immigration to reduce demand... In some European countries population growth is only due to immigration. In Spain almost 19% of the population is foreign-born and annual population growth is >1%! It's quite odd that everyone is concerned about the "housing crisis" but few people want to mention the biggest root cause, even here which is supposed to be about curiosity...
- ajmurmann 2y agoWith the low birth rates in many countries the housing problem could be solved once and for all...
- mytailorisrich 2y agoPopulation can't grow for ever. We'll need to learn to live with a constant population (and even decreasing for some time) at some point in any case... European governments do not want to face this reality and prefer to try to convince people that immigration is good (polls show that the people increasingly disagree).
- ajmurmann 2y agoWhy not? Earth doesn't look anything like Coruscant yet and we've barely settled a single planet
- cyberax 2y agoNope. "Urbanist advocates" can create real estate bubbles even with a shrinking population. Case in point: Tokyo. You just need to make sure you _have_ to live in The City, and that there are no other options for you. And a shrinking population makes that _easier_.
- rayiner 2y agoHousing prices were lower in the past when birth rates were higher.
- 2y ago
- cyberax 2y agoBuilding more housing does not reduce rents (longer-term). It increases them. Your _only_ option is to make smaller cities (and suburbs) more attractive. Sorry. Harsh but true.
- AnthonyMouse 2y agoYou're repeating propaganda from the people who want rents to stay high. The highest demand areas are high density areas. If you convert a medium density neighborhood to a high density neighborhood, the demand increases in that neighborhood, but the supply increases city-wide. The reason rents increase in that neighborhood is that even though rents in high density areas have gone down and rents in medium density areas have gone down, that specific neighborhood has gone from a medium density area to a high density area and that limited amount of construction by itself isn't enough to cause high density areas overall to cost less than medium density areas had. But notice what effect you're having on rents. The medium-density area had been $3000 units and high density units had been $4000. Now it's high density units, high density units city-wide have fallen to $3500, medium density units city-wide have fallen to $2600, the amount of housing stock has increased by thousands of new units, and you have people telling you that you've done something bad because the new $3500 units are more than the old $3000 units. Then you do it again in another neighborhood. $2600 medium density units get converted to high density units, high density units go from $3500 to $3000, medium density units fall to $2300. The high density units are now as cheap as the medium density units originally were, but you're again accused of increasing rents from $2600 to $3000. By the third time the high density units are now less than the medium density units originally were -- if you haven't already been assailed by local landlords using these arguments to prevent this from continuing -- but once again you're replacing $2300 medium density units with $2700 high density units and the claim is that you must be stopped to prevent rents from going up.
- motorest 2y ago> You're repeating propaganda from the people who want rents to stay high. I think you need to take a break and look at the real world. OP is right, and you don't understand it because you are oblivious to how things work in practice. The bulk of this sort of investment is focused on a gentrification strategy, where cheap residential buildings in low-income neighborhoods are bought to flip them to cater to a high-income market. Often, occupation density is also lowered as the number of apartments per floor is reduced so that the real estate investors can market larger, spacious apartments. The end result is that many low-income families are priced out of the market to make room to fewer high-income households. That's the reality of it. You call it propaganda, I call it ignorance.
- cycomanic 2y agoBut if you look at many cities you'll see that population has not grown significantly. What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market. Just look at the inner cities of many places (e.g. Nice) in the off season, they are completely empty. The other thing is that rents going up dramatically is a global phenomenon, e.g. Australia's building industry is relatively unregulated and it experienced a housing boom (as did many places in Europe btw), and still rents shot through he roof. The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence. I mean, in most Europe there was such a building boom (due to low interest rates) that sand for concrete was getting scarce.
- bobthepanda 2y agoLooking at raw population numbers is misleading. Average household size has declined due to changing social dynamics (longer times before marriage, fewer kids, etc.) so even if population is static you need more units. Spain went from 3 in 1990 to 2.5, which is a pretty drastic change.
- AnthonyMouse 2y ago> What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market. Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that. > The other thing is that rents going up dramatically is a global phenomenon There have been two major recent drivers of housing demand. One, the interest rates that until COVID were near-zero (which is a global phenomenon because capital markets are global). Two, since COVID, work from home causing people to move around and shift where the demand is. Also a global phenomenon. Both of these can drive short-term increases in rents on the order of a few years, but they should also drive new construction, and then once the construction has caught up to the demand the rents would go back down. Unless the construction isn't allowed to happen. > The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence. It very much is. You can take any two cities and account for things like median income and population density and when you're done you'll consistently find that the one with more restrictive zoning has higher rent.
- Tade0 2y agoMy very much European country has been building like crazy for the past two decades. Real estate still shot up in lockstep with the rest of the world because you can't and you won't build faster than people who see homes chiefly as an investment buy property. It got to a point where construction isn't even really providing housing, because the units are unusable for regular people. There's an apartment block of just studios in my neighborhood which are not up to code (too small) but were grandfathered in as construction started before it changed. The change was enacted so that developers would stop making such useless buildings. China built enough to house its entire population twice over. Didn't help them keep housing affordable just how the price of gold goes up and down despite a steady increase in supply. We're well past the point where naive supply and demand is effective. There's infinite, induced demand.
- trinix912 2y agoThe catch here is that the people who first get to buy that property usually already have tons of money and just use it as an investment, either to resell, rent it out, or use it for AirBnB & such. Solving that problem isn't very straightforward. Where I live, for example, the government has been debating taxing non-first properties up to 50% (the yearly real-estate tax). The idea of the proponents is to make it so unaffordable to own more than one property that people would stop buying it as an investment or sell off existing ones. But the issue is that the people who already own that estate (or have the money for more) would still be better off by just raising the rent to cover the increased tax instead of selling it. So it once again fails those who end up paying the rent. The only real solution seems to be government-funded developments with restrictions put in place on who can buy them, rent them out, etc. But to do that the government has to afford it somehow. They also need to put size minimums in place, otherwise we end up with the same just studios situation, which seems to be a thing with a lot of public-funded developments (perhaps because then the politicians can claim they "built X flats"?).
- kortilla 2y agoIf those buildings are “useless”, how is the developer going to make money on it? That doesn’t pass a basic smell test. Your example about China is pretty bad. They moved most of their population into cities over the past 50 years by massively building housing and making it affordable to their middle class. Young people struggling to afford their own place in a tier 1 city in China is not evidence of it failing, it’s evidence of tenants being picky. China’s housing has also had several bust cycles where the prices came down. Government intervention and bailouts prevented it from being as obvious, but supply and demand most certainly work.
- motorest 2y ago> Europe will do everything, except build more housing supply, to lower rents. I recommend you open Google maps, google Barcelona, and look at it. The whole city is a dense urban area, surrounded by steep hills. The whole city is covered with >6 story apartment blocks. This isn't the US, where you need to drive 8h to the nearest town.
- MysticFear 2y agoI recommend you looking into this new tech called steel. It allows you to build vertically extremely tall buildings.
- rad_gruchalski 2y agoAnd turn beautiful historical cities into American downtown copies?
- J_Shelby_J 2y agoWoah, I wish and dream of a city in America with a higher population density than Barcelona!
- rad_gruchalski 2y agoWe dream about and wish for different things.
- profeatur 2y agoSomeone hasn’t seen what Spanish cities look like outside the casco viejo…
- lentil_soup 2y agoNot the case of Barcelona, though. The areas surrounding the old town are specially beautiful
- 2y ago
- gadders 2y agoOr prevent mass migration.
- whyever 2y agoExcept for Vienna.
- regularjack 2y agoIn many cities in Europe, including Barcelona, there is no space to build more houses, so alternative solutions are required.
- deepfriedchokes 2y agoGo vertical?
- rad_gruchalski 2y agoYes yes we all crave for living in those 50 story skyscrapers with 5000 apartments inside. Like sardines.